Management Yesterday and Management Yesterday and TodayToday

Ch 2Ch 2

Historical Background of Historical Background of ManagementManagement

Ancient ManagementAncient Management Egypt (pyramids) and China (Great Wall)Egypt (pyramids) and China (Great Wall) Venetians (floating warship assembly lines)Venetians (floating warship assembly lines)

Adam SmithAdam Smith Published Published “The Wealth of Nations” “The Wealth of Nations” in 1776in 1776

Advocated the division of labor (job specialization) to Advocated the division of labor (job specialization) to increase the productivity of workersincrease the productivity of workers

Industrial RevolutionIndustrial Revolution Substituted machine power for human laborSubstituted machine power for human labor Created large organizations in need of managementCreated large organizations in need of management

Major Approaches to ManagementMajor Approaches to Management

Scientific ManagementScientific ManagementGeneral Administrative TheoryGeneral Administrative TheoryQuantitative ManagementQuantitative ManagementOrganizational BehaviorOrganizational BehaviorSystems ApproachSystems ApproachContingency ApproachContingency Approach

Scientific ManagementScientific Management

Fredrick Winslow TaylorFredrick Winslow TaylorThe “father” of scientific managementThe “father” of scientific managementPublished Published Principles of Scientific ManagementPrinciples of Scientific Management

(1911)(1911)The theory of scientific management:The theory of scientific management:

Using scientific methods to define the “one best way” for Using scientific methods to define the “one best way” for a job to be donea job to be done

Putting the right person on the job with the correct Putting the right person on the job with the correct tools and equipmenttools and equipment

Having a standardized method of doing the jobHaving a standardized method of doing the job Providing an economic incentive to the workerProviding an economic incentive to the worker

Scientific Management (cont’d)Scientific Management (cont’d)

Frank and Lillian GilbrethFrank and Lillian Gilbreth Focused on increasing worker productivity through Focused on increasing worker productivity through

the reduction of wasted motionthe reduction of wasted motion Developed the microchronometer to time worker Developed the microchronometer to time worker

motions and optimize performance.motions and optimize performance.

How Do Today’s Managers Use Scientific How Do Today’s Managers Use Scientific Management?Management? Use time and motion studies to increase productivityUse time and motion studies to increase productivity Hire the best qualified employeesHire the best qualified employees Design incentive systems based on outputDesign incentive systems based on output

General Administrative TheoristsGeneral Administrative Theorists

Henri FayolHenri Fayol Believed that the practice of management was distinct Believed that the practice of management was distinct

from other organizational functions from other organizational functions Developed fourteen principles of management that Developed fourteen principles of management that

applied to all organizational situationsapplied to all organizational situations

Max WeberMax Weber Developed a theory of authority based on an ideal Developed a theory of authority based on an ideal

type of organization (bureaucracy)type of organization (bureaucracy)Emphasized rationality, predictability, impersonality, Emphasized rationality, predictability, impersonality,

technical competence, and authoritarianism.technical competence, and authoritarianism.

Quantitative Approach to Quantitative Approach to ManagementManagement

Quantitative ApproachQuantitative ApproachAlso called Also called operations researchoperations research or or

management sciencemanagement scienceEvolved from mathematical and statistical Evolved from mathematical and statistical

methods developed to solve WWII military methods developed to solve WWII military logistics and quality control problemslogistics and quality control problems

Focuses on improving managerial decision Focuses on improving managerial decision making by applying:making by applying:Statistics, optimization models, information Statistics, optimization models, information

models, and computer simulationsmodels, and computer simulations

Understanding Organizational Understanding Organizational BehaviorBehavior

Organizational Behavior (OB)Organizational Behavior (OB)The study of the actions of people at work; The study of the actions of people at work;

people are the most important asset of an people are the most important asset of an organizationorganization

Early OB AdvocatesEarly OB AdvocatesRobert OwenRobert OwenHugo MunsterbergHugo MunsterbergMary Parker FollettMary Parker FollettChester BarnardChester Barnard

The Hawthorne StudiesThe Hawthorne Studies A series of productivity experiments conducted A series of productivity experiments conducted

at Western Electric from 1927 to 1932.at Western Electric from 1927 to 1932. Experimental findingsExperimental findings

Productivity unexpectedly increased under imposed Productivity unexpectedly increased under imposed adverse working conditions.adverse working conditions.

The effect of incentive plans was less than expected.The effect of incentive plans was less than expected.

Research conclusionResearch conclusion Social norms, group standards and attitudes more Social norms, group standards and attitudes more

strongly influence individual output and work behavior strongly influence individual output and work behavior than do monetary incentives.than do monetary incentives.

The Systems ApproachThe Systems Approach

System DefinedSystem Defined A set of interrelated and interdependent parts A set of interrelated and interdependent parts

arranged in a manner that produces a unified whole.arranged in a manner that produces a unified whole.

Basic Types of SystemsBasic Types of Systems Closed systemsClosed systems

Are not influenced by and do not interact with their Are not influenced by and do not interact with their environment (all system input and output is internal)environment (all system input and output is internal)

Open systemsOpen systems Dynamically interact to their environments by taking in inputs Dynamically interact to their environments by taking in inputs

and transforming them into outputs that are distributed into and transforming them into outputs that are distributed into their environmentstheir environments

Implications of the Systems Implications of the Systems ApproachApproach

Coordination of the organization’s parts is Coordination of the organization’s parts is essential for proper functioning of the essential for proper functioning of the entire organization.entire organization.

Decisions and actions taken in one area of Decisions and actions taken in one area of the organization will have an effect in the organization will have an effect in other areas of the organization.other areas of the organization.

Organizations are not self-contained and, Organizations are not self-contained and, therefore, must adapt to changes in their therefore, must adapt to changes in their external environment.external environment.

The Contingency ApproachThe Contingency Approach

Contingency Approach DefinedContingency Approach DefinedAlso sometimes called the situational Also sometimes called the situational

approach.approach.

There is no one universally applicable set of There is no one universally applicable set of management principles (rules) by which to management principles (rules) by which to manage organizations.manage organizations.

Organizations are individually different, face Organizations are individually different, face different situations (contingency variables), different situations (contingency variables), and require different ways of managing.and require different ways of managing.

Current Trends and IssuesCurrent Trends and Issues

GlobalizationGlobalizationEthicsEthicsWorkforce DiversityWorkforce DiversityEntrepreneurshipEntrepreneurshipE-businessE-businessKnowledge ManagementKnowledge ManagementLearning OrganizationsLearning OrganizationsQuality ManagementQuality Management

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)

GlobalizationGlobalizationManagement in international organizationsManagement in international organizationsPolitical and cultural challenges of operating Political and cultural challenges of operating

in a global marketin a global marketEthicsEthics

Increased emphasis on ethics education in Increased emphasis on ethics education in college curriculumscollege curriculums

Increased creation and use of codes of ethics Increased creation and use of codes of ethics by businessesby businesses

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)

Workforce DiversityWorkforce Diversity Increasing heterogeneity in the workforceIncreasing heterogeneity in the workforce

More gender, minority, ethnic, and other forms of More gender, minority, ethnic, and other forms of diversity in employeesdiversity in employees

Aging workforceAging workforceOlder employees who work longer and not retireOlder employees who work longer and not retireThe cost of public and private benefits for older The cost of public and private benefits for older

workers will increase workers will increase Increased demand for products and services Increased demand for products and services

related to agingrelated to aging

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)

Entrepreneurship DefinedEntrepreneurship Defined The process whereby an individual or group of The process whereby an individual or group of

individuals use organized efforts to create value and individuals use organized efforts to create value and grow by fulfilling wants and needs through innovation grow by fulfilling wants and needs through innovation and uniqueness.and uniqueness.

Entrepreneurship processEntrepreneurship process Pursuit of opportunitiesPursuit of opportunities Innovation in products, services, or business methodsInnovation in products, services, or business methods Desire for continual growth of the organizationDesire for continual growth of the organization

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)

E-Business (Electronic Business)E-Business (Electronic Business) The work preformed by an organization using The work preformed by an organization using

electronic linkages to its key constituencieselectronic linkages to its key constituencies

E-commerce: the sales and marketing component of E-commerce: the sales and marketing component of an e-businessan e-business

Categories of E-BusinessesCategories of E-Businesses E-business enhanced organizationE-business enhanced organization

E-business enabled organizationE-business enabled organization

Total e-business organizationTotal e-business organization

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)

Knowledge ManagementKnowledge ManagementThe cultivation of a learning culture where The cultivation of a learning culture where

organizational members systematically gather organizational members systematically gather and share knowledge with others in order to and share knowledge with others in order to achieve better performance.achieve better performance.

Learning OrganizationLearning OrganizationAn organization that has developed the An organization that has developed the

capacity to continuously learn, adapt, and capacity to continuously learn, adapt, and change.change.

Current Trends and Issues (cont’d)Current Trends and Issues (cont’d)

Quality ManagementQuality ManagementA philosophy of management driven by A philosophy of management driven by

continual improvement in the quality of work continual improvement in the quality of work processes and responding to customer needs processes and responding to customer needs and expectationsand expectations

Inspired by the total quality management Inspired by the total quality management (TQM) ideas of Deming and Juran(TQM) ideas of Deming and Juran

Quality is not directly related to cost.Quality is not directly related to cost.